TenCent uses Chinese Students and Expats to drive into US Market

StefanNov 26, 2014

Many have a vested interest in the global instant messaging battle between China’s WeChat and American rival WhatsApp. WeChat is owned by TenCent which is itself a 30% associate of Cape Town-headquartered Naspers. Depending on share price movements, the value of Naspers’s stake in TenCent often exceeds the total market capitalisation of the entire SA media company. Given that perspective, this Bloomberg story has particular relevance as it shows how WeChat is now tapping into a hidden US user base to attack WhatsApp in its heartland. There is much at stake. In the technology sector, outsided rewards accrue with market leadership. – AH

WeChat, one of China’s most popular mobile-messaging applications, is turning to thousands of students studying in the U.S. to spread its usage across the country.

One of those is Xiaoxing Han, who graduated last year from Michigan State University. Han, 25, introduced her off-campus church to WeChat, which is owned by Chinese Internet giant Tencent Holdings Ltd. Now about 15 fellow members are using WeChat to stay in touch with friends and to alert the 4,000- person Chinese community about church events.

“WeChat has everything,” said Nick Setterington, director of international ministries for University Reformed Church in East Lansing, Michigan. “Maintaining personal communication with the international community through WeChat has helped me stay in touch with people better.”

Han is one of about 274,000 Chinese nationals who studied in the U.S. in the past academic year, many of whom have become informal ambassadors for WeChat by introducing it to non-Chinese friends and classmates and helping to lay the groundwork for Tencent to expand in the country.

WeChat has grown to 468 million monthly users worldwide since its 2011 introduction, according to the company. About 3 million are in the U.S., according to GlobalWebIndex, a research firm based in London. The free app combines social and communication elements — a sort of WhatsApp meets Facebook meets Instagram — helping to spur its popularity. The app can be used in Chinese or English, with Chinese messages automatically translated into English with the click of a button.

U.S. Push

“WeChat creates fast tracks to connect with Chinese students across borders,” said Han, who majored in advertising and who now works at Michigan State as a communications coordinator. “It’s a more intimate and less formal way to connect with people.”

WeChat needs all the help it can get in the U.S., where competition is fierce as consumers gravitate to better-known American messaging apps including Instagram, WhatsApp and Snapchat. WhatsApp, owned by Facebook Inc., had half a billion users worldwide as of April.

Tencent’s chief strategy officer, James Mitchell, said on an earnings call earlier this month that the Shenzhen, China- based company has experienced some setbacks in Western markets with WeChat and has found “it was proving hard to make headway” given the competition and costs of expansion.

The U.S., with its huge technology market, remains a target for WeChat. Tencent has opened an office in Palo Alto, California, and outside spokesman Alexander Verge said the company has established a small project team in the U.S. to study the market. He declined to elaborate.

Campus Program

WeChat isn’t relying only on informal ambassadors to push deeper into the U.S. It has also been working to foster student usage in the country, organizing a program at the University of California at Los Angeles last November to spur downloads of the app beyond Chinese users. During the two-week program, eight WeChat “influencers” used 80 pizzas, 1,000 WeChat-branded sunglasses and 200 WeChat T-shirts to raise the app’s profile.

“WeChat wanted us to take it mainstream,” said Patti Regan, chief executive officer of Regan Group, a marketing agency in Los Angeles that worked with Tencent on the program. She said Regan is in discussions with WeChat to roll out more campus-based events this year.

Yeo’s Use

One of the UCLA influencers was Kelly Yeo, an 18-year-old sophomore from Los Angeles, who said she was paid $25 an hour for her work. She said the campaign was a “very standard commercial” one and that she persuaded friends to download WeChat. They also participated in pizza party contests. Yet Yeo hasn’t continued using WeChat, instead preferring to text and use Facebook’s Messenger app.

“The only reason for using WeChat is primarily geographical,” she said, adding that Chinese transplants use the app while non-Chinese students don’t appear to have as much interest in it.

Still, some of WeChat’s U.S. work appears to be paying off, with users increasing 11-fold in the U.S. to 3 million since early 2013, according to GlobalWebIndex.

WeChat is “like the buzz around Alibaba — a name that looks at us from Asia that we don’t know about but is well poised to enjoy further expansion,” said Jason Mander, head of trends at GlobalWebIndex. “The race is heating up as other apps start to incorporate WeChat features.”

Group Work

Chinese students who adopted WeChat while in their home country are now set to be the foundation of the app’s U.S. push. Henry Li, 22, a student from Beijing studying at the University of North Carolina at Chapel Hill, began using WeChat about three years ago. He and fellow students at UNC and Duke University — including non-Chinese classmates — helped spread WeChat when they were part of a 39-person committee that planned an annual three-day cross-campus event on China-U.S. relations in February.

“It streamlined work and life — it’s the default communication tool for those interested in China,” said Li, who said a few team members also began spending more time on WeChat. “Group work was made easier and fun.”

Selling Autos

Meng Meng, a 24-year-old recent graduate from the University of Southern California, who comes from China’s Shandong province, became a WeChat advocate soon after she sold her car through WeChat this August. Meng mobilized more students to use WeChat to sell cars, reposting friends’ car sale messages and asking potential buyers to join WeChat.

“In WeChat’s intimate setting, it was easier to build trust and ultimately close on deals,” said Meng, who listed her Mazda 2 for $10,800 and quickly found it the subject of a bidding war on “Moments,” a timeline feature where users can share content.

For Han, who continues to volunteer for her church, she uses WeChat frequently to communicate with Chinese newcomers and non-Chinese church members, as well as liking and reposting content from her church and even finding a photography job through mutual friends on WeChat.

“If not for WeChat, I wouldn’t have bonded with my fellow church members and newcomers,” Han said.

Sources:

Many have a vested interest in the global instant messaging battle between China’s WeChat and American rival WhatsApp. WeChat is owned by TenCent which is itself a 30% associate of Cape Town-headquartered Naspers. Depending on share price movements, the value of Naspers’s stake in TenCent often exceeds the total market capitalisation of the entire SA media company. Given that perspective, this Bloomberg story has particular relevance as it shows how WeChat is now tapping into a hidden US user base to attack WhatsApp in its heartland. There is much at stake. In the technology sector, outsided rewards accrue with market leadership. – AH WeChat, one of China’s most popular mobile-messaging applications, is turning to thousands of students studying in the U.S. to spread its usage across the country. One of those is Xiaoxing Han, who graduated last year from Michigan State University. Han, 25, introduced her off-campus church to WeChat, which is owned by Chinese Internet giant Tencent Holdings Ltd. Now about 15 fellow members are using WeChat to stay in touch with friends and to alert the 4,000- person Chinese community about church events. “WeChat has everything,” said Nick Setterington, director of international ministries for University Reformed Church in East Lansing, Michigan. “Maintaining personal communication with the international community through WeChat has helped me stay in touch with people better.” Han is one of about 274,000 Chinese nationals who studied in the U.S. in the past academic year, many of whom have become informal ambassadors for WeChat by introducing it to non-Chinese friends and classmates and helping to lay the groundwork for Tencent to expand in the country. WeChat has grown to 468 million monthly users worldwide since its 2011 introduction, according to the company. About 3 million are in the U.S., according to GlobalWebIndex, a research firm based in London. The free app combines social and communication elements — a sort of WhatsApp meets Facebook meets Instagram — helping to spur its popularity. The app can be used in Chinese or English, with Chinese messages automatically translated into English with the click of a button. U.S. Push “WeChat creates fast tracks to connect with Chinese students across borders,” said Han, who majored in advertising and who now works at Michigan State as a communications coordinator. “It’s a more intimate and less formal way to connect with people.” WeChat needs all the help it can get in the U.S., where competition is fierce as consumers gravitate to better-known American messaging apps including Instagram, WhatsApp and Snapchat. WhatsApp, owned by Facebook Inc., had half a billion users worldwide as of April. Tencent’s chief strategy officer, James Mitchell, said on an earnings call earlier this month that the Shenzhen, China- based company has experienced some setbacks in Western markets with WeChat and has found “it was proving hard to make headway” given the competition and costs of expansion. The U.S., with its huge technology market, remains a target for WeChat. Tencent has opened an office in Palo Alto, California, and outside…

TenCent uses Chinese Students and Expats to drive into US Market

TenCent uses Chinese Students and Expats to drive into US Market

2014-11-26

Stefan

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Stefan (from Austria, Europe) has been living, studying and working in China since 2010. Stefan has worked on several research, publication and consulting projects focusing on the China Travel Market. He holds two Masters degrees and is an expert on China Outbound Tourism, Marketing and Social Media in China. Stefan works with BMG on the Global Ready China Seminars as well as the Global Ready China News and related projects. He also has teaching engagements in the areas of eMarketing and Tourism Strategy.